Research
40% of Older Workers and Their Spouses Will Experience Downward Mobility
Inadequate retirement accounts will cause 8.5 million middle-class older workers and their spouses to be downwardly mobile, falling into poverty or near poverty in their old age.
ReLab's new report, "The Retirement Crisis in New York," documents two trends in retirement plan coverage: 1) retirement plan coverage is declining for all New Yorkers, and 2) disparities in coverage continue to exist based on race, education and income.
One-third of older workers have neither retirement savings through a 401(k) or IRA, nor a defined benefit (DB) pension.
Rather than being "self-financing," New York's Hudson Yards project cost the city $2.2 billion in costs, largely due to tax breaks provided by the city to incentivize development and standard development risks and costs.
Guaranteed Retirement Accounts (GRAs), proposed in the 2018 book Rescuing Retirement, are universal individual accounts funded throughout a worker’s career by employer and employee contributions and a refundable tax credit. If GRAs were implemented in 2018,1.5 million seniors would be saved from poverty or near poverty by 2025. This increases to 3.6 million seniors by 2035 and 8.1 million seniors by 2045.
- If we do nothing to reform the current retirement system, the number of poor or near-poor people over the age of 62 will increase by 25% between 2018 and 2045, from 17.5 million to 21.8 million.
- If the GRA were implemented in 2018, 8.1 million seniors would be saved from old-age poverty or near poverty by the year 2045.
Author: Teresa Ghilarducci, Michael Papadopoulos, and Anthony Webb
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Raising Social Security’s Full Retirement Age leaves all workers with two bad choices: working longer or living on reduced monthly benefits.
This report documents the growth in older workers’ unstable and low-wage jobs from 2005 to 2015. By 2015, nearly 25% of older workers were in bad jobs.
This report demonstrates how low and decreasing retirement plan coverage rates and the shift from traditional defined benefit pension plans to 401(k)-type plans are threatening New Yorkers’ financial readiness for retirement.
Older workers have not been able to save adequately for retirement.
About SCEPA
SCEPA works to focus the public economics debate on the role government can and should play in the real productive economy - that of business, management, and labor - to raise living standards, create economic security, and attain full employment.
